Official Report 509KB pdf
I welcome everyone to the sixth meeting in 2012 of the European and External Relations Committee. I make the usual request that all electronic gadgets and phones are switched off.
I would prefer it if we went to questions.
I will fire away. How have the current structural fund programmes worked and performed for Scotland, and what lessons can be learned from that?
The system has worked pretty well. Its strength is the way in which structural funds have been used to engage a range of partners in developing a range of different and new ideas. It is all very well for some of the larger organisations to operate in the mainstream, but structural funds have attracted smaller organisations into the partnerships and opened them up to new ideas, new thinking and new ways of working. In the Highlands and Islands, we are significantly engaged with a large number of relatively small organisations, which have all benefited from the way in which we have managed the programme. The structural funds have attracted people to the partnership.
I echo what Dennis Malone said. I suspect that you will note a significant outbreak of consensus among my colleagues.
I agree with Dennis Malone and Gordon McLaren. In delivering the programmes, we are performing well against all the indicators. We have already committed about 95 per cent of the available funding for the current period. We are reporting good levels of performance against the indicators that we agreed with the European Commission and we are recording historically low error rates.
I am not going to disappoint members and disagree with my colleagues, but I will add one new point and draw together a couple of the points that they made.
I am an MSP for the Highlands and Islands and my questions are probably for the two gentlemen from that region.
I, too, am old enough to remember objective 1. In fact, I managed that programme, so I am familiar with the significant investment in infrastructure not just in the Western Isles but across the Highlands and Islands. We have, alas, moved on from the funding of physical infrastructure to funding areas such as telecommunications and broadband. In terms of supporting business and people, that is probably a more appropriate use of the funds, given the restrictions and the moneys that are becoming available.
You mentioned broadband. I understand that broadband projects are under way in the Highlands and Islands. Where will they take place? Is it true that the Isle of Lewis will have a major broadband project?
My understanding is that Highlands and Islands Enterprise, under the auspices of broadband delivery UK, is pursuing a multimillion-pound investment in superfast broadband throughout the Highlands and Islands. About £5.5 million of European regional development funding is committed to that exercise.
Dennis Malone’s comment on connections is right. There does not appear to be anything in the new regulations to suggest that we can go back to the connecting physical infrastructure that was involved in previous programmes. However, there is a clear focus on renewables infrastructure and digital connectivity. The programme in the Highlands and Islands is worth £5.5 million. We have allocated £20 million in the lowlands and uplands Scotland programme. We are talking about the areas in rural Scotland that the markets will not go to. That is the test. Those that are furthest from the market will receive that support.
Can I ask you—
Mr Millard was going to answer my fisheries question.
Sorry.
I am sorry, but Mr Millard was not—it was an easy pass for Mr Malone.
Mr Malone said that Mr Millard would answer my fisheries question.
I apologise. I am afraid that it is beyond my remit, but I will speak to my colleagues and arrange to respond in writing.
Are you satisfied, Mr McGrigor?
My apologies, convener.
I know that the Commission has proposals for using multiple funding packages. Will the broadband programme be an example of that? Will you give us some insight into how that will be taken forward?
In the new programming period, a number of funding options are emerging around project bonds, the ERDF and the connecting Europe fund. This is probably a question that I can pass to Jim Millard, because he will be more involved than I will be in the connecting Europe fund in future.
It is really about identifying our needs and priorities and working out which funding avenues will work best for us. Sometimes the judgment will be one of scale, but equally it might be one of timing or the extent to which we have more or less influence over how the various funds are distributed.
This question might be for David Souter, but the witnesses can throw it about among themselves if I am wrong about that. In the ESF programme, for lowlands and uplands Scotland, priority 1 is progressing into employment and priority 2 is progressing through employment. Are those priorities targeted mainly at the voluntary sector or are they aimed more at industry? The reason I ask is that I know that many voluntary sector organisations are always looking for ways in which to fund their programmes for three-year periods and suchlike. Are those two priorities the way forward for them?
We have moved on from those priorities. We have moved all the available resources into a new priority, priority 5, which encompasses the whole skills pipeline. However, the question on the voluntary sector is still valid, as it is a key strategic partner in priority 5. That links back to some of the evidence that the committee heard in December about the audit burden.
That is a lesson that has been learned in the current period for the 2014 to 2020 period.
Absolutely. It is frustrating that we place such a heavy burden on project sponsors. Some of that comes at a price for the funds. As I said, we sometimes make it difficult for ourselves. One of the ways in which we do that is through expecting small third sector organisations to withstand a fairly heavy audit burden six or seven years after they have received funding. We must address that seriously.
Is it within the power of organisations here in Scotland to deal with that, or is that power centralised in Brussels?
It is sometimes easy to blame Brussels. Much of the issue comes down to the control systems that we set up in Scotland and how we choose to deliver the funding through the CPPs. The CPPs are new and are still fairly innovative. They are one example of us being ahead of the game in delivering structural funds. However, we did not think through how the CPPs would interact with the delivery agents. We have learned that lesson strongly from the current programme period.
To add to what David Souter said on the CPP arrangement, those are multipartnership bodies that are led by the local authorities. As David Souter said, the role of small voluntary sector organisations is key, particularly to delivering employability services locally. Therefore, it is key that that capacity remains. Those organisations are small and vulnerable, so any delays in the new programme starting up could be critical. That is always a risk.
I used to run an ESF-funded project a number of years ago. The monitoring period was a big nightmare, because most of the staff were tied up pulling together all the stats. For some organisations, almost a quarter of the budget was spent on gathering all that information and dealing with the bureaucratic nightmare that ensued. Are you suggesting that that burden could be completely removed from some organisations, with the result that they will be able to focus all their funding on the front line?
No, not quite, unfortunately.
That was too good to believe.
The machine has to be served. In the same way that the Parliament would require such accountability, we have to be accountable for how we spend the money and what we deliver for it, but the key thing is that I do not think that the organisations in question would have an issue with that. Monitoring progress from the point of view of the number of beneficiaries and the benefits for individual beneficiaries is not an issue for them. I am talking more about the burden of applications, claiming and so on.
That would also take away the nervousness that exists as the end of the funding period approaches, when people wonder whether they will need to issue their staff with section 93 notices, because they are not sure that they will get their next bit of funding.
I agree with Gordon McLaren, but I would like to see whether we can go further in the new programme period and take away the majority of that audit burden from third sector organisations. If we can find a way of delivering through the strategic partnerships, that will take away the requirement for third sector organisations to build complicated match-funding packages—we all accept that that will become more difficult to do in future—and will allow them to focus much more on delivery. Another advantage for third sector organisations is that if we get this right, instead of having to keep all the bus tickets, the time sheets and so on, they will be able to recover the full costs. We will be able to use some of the simplifications and some of the unit costs to deliver something that can be audited and which can stand up to scrutiny.
I would like to pursue the issue of the voluntary sector. Our briefing paper mentions a report that was done some years ago by Hall Aitken, which was about the threat that the co-financing arrangements presented to the voluntary sector. Has any analysis, consultancy work or research work been done to assess whether there has been an impact on the voluntary sector? We hear that it is not so much of an issue for the bigger voluntary organisations, but I am thinking back to the days, a long time ago, when I was a project director for West Fife Enterprise, which was a very small voluntary organisation. We applied for £1 million and, to our amazement and that of everyone around us, we got it.
That is a good question. This debate has been going on for a long time and comes back to my point about the vulnerability of voluntary sector organisations. There are some very good organisations out there; indeed, I am interested in your reference to West Fife Enterprise, which, despite the vagaries of funding and the amount of time and energy that it spends on securing match funding and additional European funding, is still going strong and delivering a quality service.
That is fine for established voluntary sector organisations—of course, West Fife Enterprise is now more than 20 years old—but how can the very new and very creative organisations break into that community programme partnership and establish their way forward?
They can do that through the Scottish Council for Voluntary Organisations, which is the national network body for the third sector. However, they will want to be connected to the local authority, if they are not already, and they will probably be getting some funding from it. If an organisation is new to delivering these services, it needs to establish itself and make itself known. Of course, having no track record and being an unknown quantity can be constraints and, as you will understand, might well be a factor in the procurement process.
In response to Mrs Eadie’s question and picking up on Gordon McLaren’s point, I suspect that it is easier for a new organisation to make itself known, to be taken seriously, to develop and to build confidence at the local level through the CPP rather than through taking a chance and bidding into a competitive programme run at a lowlands and uplands or Highlands and Islands Scotland level. I hope that the CPP arrangements work in favour of smaller organisations more than centralised competitive arrangements.
CPP arrangements in the Highlands and Islands are slightly different from those that are implemented in lowland Scotland. We are seeing more smaller organisations coming to the intermediate administrative body for assistance in framing their project prior to making their submissions, and we are embracing them.
I have one more question. Historically, going back to the days when Bruce Millan was a commissioner, additionality was a huge issue, and councillors and members of Parliament from all over Scotland lobbied the Commission on it. As politicians, we are all concerned about whether the money that comes from Europe is truly additional to the money from the public purse that we are spending here in Scotland.
I am happy to put my hand on my heart. We have had that debate so many times, over so many years. I think that we can put our hands on our hearts, and we have proved time and time again that the money is genuinely additional. It is ring fenced, and it is there for a seven-year programming period, which is unique in terms of public funds. We can point to the fact that it has made a difference.
It is easier to prove additionality in certain projects. In areas such as the venture capital and access to finance funds and the infrastructure projects, we can demonstrate that we are making more deals and engaging in more activity. The Commission will continually come back and challenge us on a lot of the ESF interventions, and say, “Would this have happened anyway?”, but we have always satisfied every audit. The Commission has pushed us pretty hard to prove additionality, and we have done that so far.
We can show additionality at the local project level, as David Souter said. We can raise our game a wee bit, in as much as we can point to core budgets for Skills Development Scotland or Highlands and Islands Enterprise and show that ERDF and/or ESF are genuinely adding to and enhancing those budgets.
Can Dennis Malone put his hand on his heart?
I do not want to repeat anything; I just want to be sure that, as we move towards a much more strategically designed programme, the managing authority is able to provide the transparency to demonstrate that the additionality exists. It is a wee bit more of a challenge for those authorities.
The community planning partnerships have changed quite a bit, and the language has become very outcome driven in the move to the preventative spend agenda. Are you confident that the Commission understands where we sit in that regard, and that our approach matches the outcomes that the Commission seeks from the structural funds?
The Commission is not only aware of but very interested in how we are delivering structural funds through the community planning partnerships. The Convention of Scottish Local Authorities representative who was here in December, who is based in Brussels and talks to the Commission, reported that the Commission views our model as something that it cannot find anywhere else in Europe, and that it is very interested in how Scotland is performing.
On a personal level, when it was first mooted back in 2006 that the CPPs might be a delivery vehicle for certain aspects of the ESF and ERDF programmes, I was somewhat sceptical and wondered whether they would be an effective vehicle. The CPPs went through a particularly painful process, but that dynamised them and gave them a clear focus. We were looking purely at employability services, mainly with the ESF but with some ERDF complementary support. Some of the CPPs were transformed and gained a new purpose.
Could the CPPs work closely with the new social innovation programme on preventative spend, which my colleague Clare Adamson mentioned, on issues such as health, justice, childcare and unemployment?
I am not fully familiar with that programme. However, CPPs are set up with a multi-agency arrangement, in the sense that we funded them to deliver employability. They took on a particular focus in the delivery arrangements and with the delivery bodies within that. A lot of the issues around employability touch on a wide range of issues including health, and disadvantage and deprivation. There is now the opportunity to take a much more holistic and coherent approach to those issues. However, as I said, I am not fully familiar with the innovation funding to which the convener referred.
Do the Scottish Government officials have a comment on that? My suggestion chimes closely with Scottish Government policy.
The clear direction of travel is towards more preventative spending. The new regulations are a lot more permissive in allowing us to support early interventions. The current regulations are quite tight on that. I think that ESF basically allows us to go to pre-NEET—not in education, employment or training—which is as far back as we can go in the current programmes. The new programmes recognise much more the importance of early intervention.
Aileen McLeod is next; I believe that she will change the topic slightly.
I want to ask about the territorial co-operation programme. What has been your experience of the delivery of projects under that funding programme? I remember that we had the Interreg IVA programme for Northern Ireland, Ireland and western Scotland. Has any assessment been undertaken of where there could be new and on-going opportunities and what Scotland will need to do to ensure that we continue to improve our engagement in that area?
The experience with Interreg, or territorial co-operation, programmes in the current programming period is very positive. We can point to Scotland participating fully and not only drawing down funds but contributing to projects with partners from around the European Union and slightly further afield. Scotland is a positive partner, which contributes and benefits.
I have a query. There is the Baltic commission, the North Sea Commission, the Atlantic commission and the Mediterranean commission—I think that there are five such commissions. What connections do local authorities across Scotland make with the work of the officials?
They do that extremely well. One reason that the North Sea programme works so well is that the North Sea Commission is strong as a partnership. It brings a degree of political buy-in to the North Sea concept. The North Sea Commission and the others tend not to have a lot of resources at their disposal, but the programmes do. In a sense, you can bring the political support, the ideas and the energy through local authority participation in the commissions and match that with ERDF funding through the programmes. My colleagues from Scottish local authorities in the North Sea Commission have certainly had a very positive experience.
But we could do better with some of the others, perhaps.
We could always do better, I suppose, but that is absolutely a fair comment. We have seemed not to do as well in a couple of the other programmes.
We have already heard that up until 2012, the Highlands and Islands and lowlands and uplands programmes were delivered by the Highlands and Islands programme and the ESEP. Now, both programmes are managed by the Scottish Government. We know that the accession to funds is also changing with a move from direct spending towards co-financing. You spoke about the difference between geographical areas and themes, but do you feel that that is being hijacked by the Scottish Government to promote national themes rather than local ones?
No, that is not the intention or the purpose. Our operational programmes have always reflected Scottish Government priorities and those priorities resonate well with European priorities, as expressed first through Lisbon and now through the EU 2020 initiative. In a sense, many of the beneficiaries from and recipients of structural funds support—such as local authorities and the two enterprise bodies—subscribe to and work within Scottish Government priorities. There is consistency. It is not a question of railroading or diverting the programmes or their purpose.
The suggestion seems to be that the aim is to achieve priorities for spending that more closely reflect national priorities. That is what it says in our brief, and I wondered whether you could comment on that.
Sorry, Jamie. May I suggest that that is perhaps a question for the cabinet secretary when he comes to the committee? You might get a much more forthright answer from a cabinet secretary on that because it is straying into a political point.
But I am asking the witnesses the question. Is it out of order?
I do not think that they are at liberty to answer the question in the way that you want it to be answered. Trust me, please.
Are you ruling me out of order, convener?
I am not. Your question is a valid question, but I think that it might be better directed at the cabinet secretary.
I want to pick up on Jim Millard’s comment about observing programmes and steering committees. Can you give me an example of any success you got by doing that?
We participate in a number of the Interreg monitoring and steering committees. Participation is on the basis of each participating country or region being represented. The benefit that we get is that, as members of the committees, we can discuss and influence policies and priorities as they affect the programmes, the delivery of the programmes and the selection of projects.
I understand what you say, but to narrow it down, can you give me an example of where that has led to success? Will you come back to me later if you cannot think of an example now?
I will come back to you later.
Okay. Thank you.
We need to finish at 3.15 in order to set up for the videoconference with Mr Mundell. We will therefore make Aileen McLeod’s question the final one, and I ask the witnesses to answer as succinctly as possible.
Last week, the European Commission published its staff working document on the common strategic framework, which is a core element of the proposed regional policy architecture for the 2014 to 2020 funding period, along with the proposed partnership contracts and the operational programmes. As you know, the aim is to ensure that there is a closer alignment with the ERDF, the ESF, the cohesion funds, the rural development fund and the fisheries fund, along with the wider EU 2020 strategy.
I will be brief. The opportunities are around the close alignment between the themes that are emerging from the Commission and “The Government Economic Strategy”. The close synergies give us an opportunity to build programmes that are close to what we want to do. They also give us an opportunity to explore how ambitious we want to be in how the funds operate together to create more of an impact on the ground.
It provides an opportunity to save a lot of energy. At present, a lot of energy is misspent because project partners chase umpteen sources of funding, and either they get nothing or the funding is duplicated. We need to avoid that. In the Highlands and Islands, we have had numerous experiences in which we have worked with organisations for several months to bring forward applications, and then they have decided that they will get a better offer from the rural development programme or LEADER. That is frustrating, and it is a waste of everybody’s time.
Aileen McLeod mentioned challenges. The challenge is to make the best use of what will be limited funds. It sounds as if there is a lot of money, but it is not much when it is spread over seven years. We need to ensure that we concentrate on priorities and that we do not have gaps between provision so that we get full provision across the funds.
Gordon McLaren can have the final word.
Thank you, convener. I agree with everything that my colleagues have said. The Commission has set an ambitious challenge. I think that it would acknowledge that it could not achieve it, but it has set us the challenge. Given the experience in Scotland, it is perfectly possible, but it is not without difficulties. We had issues in the past when there was poor communication between programmes and there was overlap and duplication. As I said, we have time to plan effectively for the new round of programmes. That is possible, but it is hugely challenging. We need to put in place co-ordination mechanisms and governance arrangements that will allow that level of communication, articulation and integration.
Thank you for your evidence. You have given us a number of threads that we will pick up and carry forward in our inquiry. On behalf of the committee, I thank you.
Previous
Attendance